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Trading Glossary: P

These are common terms used in the financial services industry
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Pip

Normally used in reference to forex rates, a 'percentage in point' is generally, though not always, the fourth decimal place, i.e. 0.0001. Traditionally a pip was the smallest point by which a forex rate could move, but this is no longer the case.

Pivot points

Used in technical analysis, pivot points use the previous period’s high, low and close to calculate the current period’s support and resistance levels.

Portfolio

A collection of investments owned by an individual or company.

Position

An open trade that you have in the market.

Position margin

The amount of equity that a CFD trader is required to pay in order to open a new position.

Position sizing

The size of a position within a particular portfolio. It’s also associated with a risk management technique where an investor calculates the size of each new position so that the maximum likely loss on the position does not exceed a certain amount or a certain percentage of their capital.

Producer Price Index (PPI)

A statistic that measures changes in the price of finished goods and services sold by producers.

Profit and Loss (P&L)

Abbreviation of profit and loss; an account compiled at the end of an accounting period to show gross and net profit or loss. In spread betting and CFD trading, it shows money gained or loss incurred on a position.

Purchasing Managers Index (PMI)

An indicator of economic activity created through surveys completed by mangers in a number of manufacturing companies. It provides a picture of economic conditions within the manufacturing sector, and is often used by investors to predict future GDP numbers for a country's economy.